Momentum Monday – Traders Have A Lot To Choose From

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Good morning everyone. Momentum Monday is a day late as the markets were closed for Memorial Day.

As you know, I start each week looking through The Stocktwits 25 which is free and anyone can quickly sign up.

Ivanhoff and I get together Sunday to rip through the markets and see if there is anything we are excited about or worried about in the markets as we look at the leaders and momentum.

You can watch this weeks episode here. I have embedded it below on my blog…

Ivanhoff’s thoughts are below…

The S&P 500 is consolidating in a tight range near its all-time highs. The Nasdaq 100 is not too far behind. The small-cap index, Russell 2000 is back above its 50-day moving average. In other words, the market is hitting on all cylinders. For the most part, everything is rising. This is a notable change of pace compared to the last two months which were characterized by frequent sector rotations – when basic material and financial stocks went up, tech suffered, and vice versa. The one thing that has remained the same is the short-term nature of most moves. We continue to see a lot of intraday fading. It seems institutions are still not interested in chasing breakouts but they eagerly scoop up pullbacks.

The most shorted stocks were the big gainers of in the past week or so. The so-called meme stocks that went crazy in late January, had a second round. Some of them even exceeded their January levels. AMC, for example, went from $10 to $35 in two weeks. All other meme runners were also on fire – GME, DDD, SPCE, FUBO, etc.

The U.S. Dollar’s weakness is reincarnating interest in emerging market stocks. Brazil and other Latin American ETFs had major breakouts last week. Quite a few Chinese tech, biotech, and financial stocks are perking up and setting up. There’s notable strength in other areas of the market as well – industrial metals, gold, silver, oil, semis, medical devices, cannabis, even some software stocks are trying to push higher.

What I have noticed…

Car parts and auto stocks looking good (not for my taste but pointing it out).

Some Chinese stocks starting to wake up with the Renminbi hitting new 3yr highs against the U.S. Dollar.

Only 24% of the world population is COVID vaccinated. I don’t know how much of that is priced in but both $BNTX
and $MRNA (the vaccine creators) are acting constructively.

Financial stocks like $GS and $JPM continue to trend higher near all time highs.

Retail investors will not go away quietly…they have not been scared by the crypto crash…they have came right back for the silly stocks like $GME and $AMC

Here is Charlie’s 5 chart Friday.

Finally, Nikita has been working at Social Leverage from Vancouver since January. We finally got her over the border to meet the team in Phoenix. She has been following the SPAC markets for Social Leverage and we both agreed that the premiums that were silly just a few months ago have become discounts that may offer opportunities. Have a read of her latest newsletter. She put together a list of SPAC’s that she would consider purchasing here for at least a trade.

Have a great week.

Disclaimer: All information provided is for educational purposes only and does not constitute investment, legal or tax advice, or an offer to buy or sell any security. For full disclosures, click here